How "sharks" manipulate the market and take profits from retail traders in forex or financial markets?
How "sharks" manipulate the market and take profits from retail traders in forex or financial markets:
- Liquidity traps:
Luring investors into orders: Sharks create the illusion of a market trend by suddenly pushing prices up or down, attracting retail investors to buy or sell orders accordingly.
Reversing the trend: When the order volume from retail investors is large enough, sharks will reverse the trend, causing investors to lose money and be forced to cut losses.
Profit taking: Sharks profit from the price difference and transaction fees when investors cut losses.
- News traps:
Spreading fake news: Sharks spread fake or inflated news to deceive investors about the value of an asset.
Creating FOMO: When investors believe the fake news, they will FOMO (fear of missing out) and buy or sell massively, creating an opportunity for sharks to manipulate prices.
Profit taking: Sharks profit from the price difference when investors buy or sell based on fake news.
- Psychological traps:
Taking advantage of greed and fear: Sharks use psychological tactics to get investors to make wrong decisions.
Triggering Stop-loss orders: Sharks push prices close to investors' Stop-loss levels, causing them to automatically cut losses.
Profit taking: Sharks profit from the price difference and transaction fees when investors cut losses.
- Using superior technology and resources:
Algorithmic trading: Sharks use automated trading algorithms to manipulate the market faster and more efficiently.
Access to market data earlier: Sharks can buy market data earlier than retail investors, helping them predict price trends and make profitable trading decisions.
How to protect yourself:
Persistently learn and improve knowledge: Mastering knowledge about the forex and financial markets is a crucial factor for retail investors to protect themselves.
Trade with a clear plan: Always have a specific trading plan and follow the discipline.
Effective risk management: Use risk management tools like Stop-loss to limit losses.
Trade with a reputable broker: Choose a reputable and transparent broker to ensure the security of your trading account.
Note:
The forex and financial markets are a risky environment.
Retail investors need to be cautious and equip themselves with the necessary knowledge before participating in trading.
No strategy guarantees 100% success.
Advice:
Always learn, improve your knowledge and practice trading skills to improve your chances of winning in the market. Never invest money you can't afford to lose.
Good luck!
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